The U.S. Federal Emergency Management Agency (FEMA) has estimated the range for total losses paid by the National Flood Insurance Program (NFIP) stemming from Hurricane Helene to be between $6.4 and $7.4 billion, based on data as of January 31st, 2025.
FEMA has reported that as of February 6th, 2025, Hurricane Helene has received more than 57,400 flood insurance claims totalling more than $4.5 billion, up from more than 55,000 claims filed as of November 7th, 2024, when FEMA pegged the NFIP loss range at between $3.5 billion and $7 billion.
So, FEMA is now estimating that Helene could result in a further $400 million of total losses paid in to the NFIP, taking the top-end of its range to $7.4 billion.
Meanwhile, and also based on data as of January 31st, 2025, FEMA estimates that Hurricane Milton could cause an estimated loss of $1.2 billion to $2.9 billion for the NFIP, having now received more than 21,100 flood insurance claims totalling more than $740 million.
With projected payments from these two hurricanes now exceeding $10 billion, FEMA has borrowed $2 billion from the U.S. Treasury to pay eligible NFIP policyholder claims, exercising its borrowing authority under the National Flood Insurance Act of 1968.
FEMA explained that, usually, NFIP’s premiums are sufficient to pay claims in years without catastrophic floods, but the heavy rain events in 2024, including hurricanes Helene and Milton, have caused massive, widespread damage resulting in tens of thousands of flood insurance claims.
It should be noted that the NFIP is not designed to pay for multiple catastrophic events in a single year without additional financial assistance, which means the combined losses from 2024 have depleted the funds generated from premiums to pay claims.
FEMA’s borrowing authority is $30.425 billion, of which $20.525 billion has already been borrowed in the aftermath of hurricanes Katrina, Sandy, and Harvey between 2005-2017. The debt now stands at $22.525 billion. NFIP provides about $1.3 trillion in coverage to nearly 4.7 million policyholders nationwide, explains FEMA.
Elizabeth Asche, Senior Executive, NFIP, commented, “The widespread, devastating flooding following hurricanes Helene and Milton reemphasizes the financial effects flooding can have not just to survivors but also the National Flood Insurance Program.
“We are strategically utilizing short-term borrowings in 60-day increments, demonstrating our careful and responsible management of the borrowing authority. Despite these challenges, the NFIP remains unwavering in its commitment to fully pay every claim and ensure policyholders receive the compensation they are owed for eligible flood-related losses.”
The post FEMA lifts NFIP’s Helene loss estimate to up to $7.4bn appeared first on ReinsuranceNe.ws.
